ICT companies are facing decreased revenue due to the COVID-19 pandemic. — Photo cafef.vn Hanoi (VNS/VNA) - Revenue of information, communication and technology (ICT)firms was estimated to have fallen by 30-90 percent in the first quarterof the year due to the COVID-19 pandemic.
Thisinformation was released in a report prepared by the Ministry of Informationand Communications (MIC) to submit to the Prime Minister at a conference heldon May 9.
Theministry said many contracts and projects of ICT companies were cancelled orhalted because of the pandemic. Others were facing capital shortages while somelacked imported materials and spare parts as well as labourers.
MICsaid most of local ICT businesses’ partners come from the US, Japan, theRepublic of Korea and European countries. However, these countries havebeen facing the crisis caused by the novel coronavirus. Therefore, it wasdifficult to seek or maintain customers.
Customersalso reduced the number of their projects. Those from Europe cut their existingcontracts by 60-70 percent while customers from the Asian region fell 40 percentsince March. In addition, new projects which had been under negotiation werehalted.
Theministry said the online entertainment segment such as social networks andvideo platforms reported less ad revenue despite the increasingnumber of new users. Companies decided to temporarily halt their marketingstrategies amid the pandemic. It was forecast that the revenue of onlineadvertising would be reduced by 15-20 percent.
Thesame situation has been seen in the online game market as the revenue in thefirst quarter of this year would be also lowered by 10 to 20 percent incomparison with the same period last year. The country’s game industry dependson foreign partners, mainly those from China.
Thepostal sector reported decreased revenue of 10-20 percent a month as travellingamong localities was limited due to social distancing.
Tountie the difficulties of businesses in the ICT sector, the MIC proposed toaccelerate administrative procedure reform, enhancing the IT application inpublic services.
Financialpackages to support enterprises should be launched while developing policies tokeep prices of inputs stable.
Italso proposed to promote public investment in co-operation with mobilisinginvestment from the private sector and creating markets for businesses. TheGovernment should further promote development of start-ups and innovation firmsin the digital technology sector.
MICasked the Finance Ministry to add some enterprises in the ICT sector tosubjects entitled to enjoy extensions for paying tax and land rental aswell as considering exemptions and reductions of corporate income tax./.
VNA
